Willie Penrose (Westmeath, Labour)

I thank the Minister for his reply. I hope he is not creating a false dawn for many people or that he is not creating a smoke and mirrors effect. He launched a fairly strong attack, which I supported, on licensed moneylenders during a recent interview. He referred to a significant increase in those seeking help from MABS. Is he preparing legislation that would make it illegal for such licensed moneylenders to charge such exorbitant rates of interest to low income families? I refer to families that are dependent upon social welfare and low incomes. He has indicated that in one case, a legal lender charged 39% interest to people who were borrowing to pay for family events, both anticipated and unanticipated, such as first communions, bereavements and Christmas, of which we are on the cusp.

Why did the Minister's predecessor launch an attack upon MABS by taking away its facility and ability to allow such people to be given €10 to €20 per week from MABS, almost as a subsidy? It was essential for such people who were trying to get out of the grip of moneylenders. MABS played a key role in this respect, apart from the excellent work it does nationwide and for which Members salute it. Members also support the legislation to be introduced to strengthen its role and to streamline the service.

Will legislation be brought forward to curtail or restrict the rates charged to such unfortunate people by simply making it illegal to so do? Why are the financial institutions charging exorbitant rates? Has the Financial Regulator a role in this regard? Has the Minister spoken to the credit union movement — the poor person's bank? This movement has always been willing to help and might open up avenues of access for such people. It might increase the access of people on low incomes to credit when they are obliged to borrow.

I will put this another way. People who are on low incomes or on social welfare must expend what they have on basic necessities to keep themselves alive. I refer to expenditure on clothes, food, fire and fuel, after which little remains. Is the position of such people not exacerbated by the enormous increases in fuel and electricity costs? Consequently, greater numbers of such people must resort to borrowing to meet their normal demands, as well as both planned and anticipated events. Would it not be far worse if the Society of St. Vincent de Paul had not spent approximately €50 million last year helping those people with inadequate incomes? What would the situation be like if the various organisations throughout the country did not help? Are those people who charge exorbitant rates not simply preying on the vulnerable? Matters would be even worse were it not for the intervention of MABS.

A total of 46 moneylenders are licensed by the Financial Regulator. These people are allowed to charge an annual percentage rate of up to 188% for loans, payments of which are collected each week by door-to-door salesmen. Was it not this scenario that drove Tralee Credit Union to publish a few weeks ago a leaflet entitled Keep the wolves from the door this Christmas? This leaflet encouraged members of the credit union to turn to it rather than to moneylenders. Such promotions also have been run by Waterford Credit Union, Newry Credit Union, St. Francis Credit Union in Ennis and Finglas Credit Union in a bid to wean people away from moneylenders. A problem exists when all these very responsible institutions, particularly credit unions, are taking an active and positive step in this regard.

Will the Minister take steps to bring forward a promotional campaign to ensure that people are diverted away from those moneylenders who are charging exorbitant rates, particularly as we head into the month of Christmas when there are so many demands, particularly in low-income households, and people are pressurised by the strength of advertising for various toys and gadgets? Parents in such households often feel under pressure and it is surely an opportune time to step forward. Above all, is the Government not contributing to the situation in which people find themselves by increasing various forms of indirect tax, thereby diminishing the level of income available to these people and forcing them to go elsewhere to borrow money, often for necessities?

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